Failing Health Care Co-ops Will Cost Taxpayers

Consumer Operated and Oriented Plan Programs (COOPs) were really a political compromise between Members of Congress who wanted a public plan option and those who didn’t. Once the Affordable Care Act passed, COOPs had outlived their usefulness. However, they are now failing and will cost taxpayers plenty. Senior Fellow Devon Herrick testified before a congressional committee.

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The Roth IRA

The tax bill also created a new type of individual retirement account, the Roth IRA, named for the Senate Finance Committee chairman, who promoted the idea. The Roth IRA differs from a conventional IRA in that contributions are made with aftertax dollars but distributions, including earnings, are tax-free.

Contributions are limited to $2,000 yearly, but eligibility to contribute is phased out for single taxpayers with adjusted gross incomes between $95,000 and $110,000 and for joint filers with adjusted gross incomes between $150,000 and $160,000. The law also allows a holder of a conventional IRA to pay taxes on it and convert it to a Roth IRA.

Both a taxpayer and spouse can contribute to Roth IRAs if their income is at least equal to the contributions. People can contribute to Roth IRAs even if they participate in a pension plan or contribute to conventional IRAs.

Proponents of Roth IRAs have long contended that the additional economic growth stimulated by funds from Roth IRA investments will generate new tax revenue that will more than offset any loss in taxes from making withdrawals tax-free.38